Fed’s Preferred Inflation Gauge Rises 3.4% in August, Backing Another Rate Hike
Updated
Updated · The New York Times · Sep 30
Fed’s Preferred Inflation Gauge Rises 3.4% in August, Backing Another Rate Hike
3 articles · Updated · The New York Times · Sep 30
Summary
U.S. prices rose 0.3% in August from July, leaving the Fed’s preferred inflation gauge up 3.4% year over year and reinforcing September’s first rate increase in about three years.
Core PCE climbed 0.2% on the month and held at 3.0% annually, showing underlying price pressures remained sticky even after Commerce Department methodology changes lowered past core readings back to 2021.
Rates now stand at 3.75% to 4.0%, and most Fed policymakers still expect at least one more quarter-point increase this year while delaying rate cuts until 2028.
October has become a closer call: New York Fed President John Williams said there was 'no need for urgency,' pulling market odds for another hike from about 70% earlier this week to roughly even.
The next tests for that path arrive quickly, with the September jobs report due Friday and the next CPI reading on Oct. 14, ahead of the Fed’s late-October meeting.